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Iran conflict pushes mortgage rates higher, cooling housing demand in 2026

MBA purchase applications turned negative year over year as mortgage rates spent more time above 6.6%, while weekly pending sales also slipped versus a year ago.

Reported · Written up by our desk · Residential

Housing demand in 2026 stayed mostly positive until mortgage rates rose above 6.64% for longer stretches, HousingWire reports. The outlet says purchase activity and broader demand improved earlier in the year when rates were lower, with seasonal factors such as winter weather and holidays sometimes distorting short-term data.

HousingWire cites fresh data showing mortgage purchase applications turning negative year over year in recent weeks. It also points to weekly pending sales of 66,177 versus 67,173 a year ago, while total pending sales were 379,819 versus 376,196.

The slowdown comes as the Iran conflict continues and the Fed has raised it as a hawkish talking point, according to HousingWire. The outlet also links the move in rates to a wider risk environment, including a trade war with Canada.

HousingWire adds that pending home sales provide a week-to-week view that is typically reflected in sales activity over the following 30 to 60 days, and that year-over-year comps can get harder once rates move above the 6.64% threshold. The piece says negative year-over-year prints need context, even while noting that some weeks earlier in 2026 showed double-digit growth.

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